Question about Tenants in Common

Discussion in 'Legal Issues' started by [email protected], 29th Nov, 2019.

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  1. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I know a TIC can dispose of their ownership interest. ie A can sell their 50% to C.
    I know a Deed of partition allows a identifiable interest in undivided property to be recognised

    Question for lawyers ... Can TWO TIC owners (50% lets say) each BOTH dispose of their respective interests to each other ? Could the property be partitioned so that A owns the left side of the lot and B owns the right. And then they exchange ? The market value of A>B would likely equal the value of B>A.

    What am I looking to do is not change title but trigger CGT event A1. I will explain why later

    If it could be done...I suspect land titles wont register a transfer. I have no specific concerns about that.
     
    [email protected], 29th Nov, 2019
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  2. thatbum

    thatbum Well-Known Member

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    Not an expert on these issues like Terry, but I suspect its not a problem to do.

    As I understand it, a deed of partition works mechanically by having the legal owner actually be a holder of title on trust for the ultimate owner. So the only difference with this scenario is that the equitable interest is 100% of the the legal interest rather than 50% or whatever the usual scenario is.

    No idea whether there's other side effects of this though - but on core principles I don't see any difference.
     
    thatbum, 29th Nov, 2019
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  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    I don't see why not.

    From a tax point of view many issues to consider, but legally no reason why both could not sell to each other. Probly no duty on it unless it was partitioned beforehand.

    But I am no property lawyer
     
    Terry_w, 29th Nov, 2019
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